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Tax Cuts for the Wealthy or Food Stamps? A Cost Comparison

REUTERS/Mario Anzuoni

By Michael Rainey

May 1, 2018

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The Center for American Progress, a liberal think tank in Washington that has been sharply critical of the Republican tax overhaul, published an analysis Tuesday that compares the tax cuts for the wealthiest 1 percent of households to the revenue required to fund the Supplemental Nutrition Assistance Program, or SNAP, in each state.

While clearly an exercise with a point to make – the authors write that “comparing the tax cuts for the top 1 percent with the relatively modest cost of providing nutrition to families in need highlights the misguided priorities of the current administration and congressional majority” – the analysis produced some startling results.

For example, the wealthiest 1 percent of households in Alabama will receive a $1.2 billion tax cut in 2019 – a remarkable number for a state with a population of less than 5 million and a median income of $46,257 in 2016 – which would fund SNAP for about 826,000 state residents, more than currently projected to be in the program.

Overall, the top 1 percent of households in the U.S. will receive $84 billion in tax cuts in 2019, while the cost of SNAP in 2019 is estimated to be $58 billion. “This means that the tax cuts to the top 1 percent alone could finance the entire SNAP program for nearly 1 1/2 years,” the authors Galen Hendricks and Alex Rowell write.

The largest tax cut for the wealthiest households will occur in Florida, where the top 1 percent will receive $10.7 billion in 2019, enough to fund SNAP for 7.2 million people in the state, more than twice the projected number of recipients. Texas is a close second, with the wealthiest 1 percent of households seeing a tax cut worth $10.1 billion in 2019, enough to fund SNAP for nearly 7 million people, or almost twice the projected level.

At the other end of the spectrum, the smallest aggregate tax cut will occur in Vermont, where the wealthiest households will get a tax cut of about $110 million – though that’s still enough to fund the state’s SNAP program and then some. In terms of the percentage of the SNAP program funded by the tax cuts, New Mexico and West Virginia come in last; the aggregate tax cuts for the top 1 percent of $348 million in New Mexico and $250 million in West Virginia would cover about 57 percent of each state’s SNAP program.